1.Identify its international markets
? US and North America identified
o Distribution network ? 44 states.
o Size ? initially estimated 20-30 thousand cartons to 100 thousand cartons, reality was 20 to 200 thousand.
o Annual sales $3 million.
? UK
o Some regional supermarkets hoping to expand to majors.
? Mainland Europe
o Some beginning sales.
2.Describe and analyse the reason for its international expansion
? Increase sales/find new markets ? domestic market oversupplied
? Minimise competitive risk
? Economies of scale
? Cushioning economic cycle
? Comparative advantage
o High cost of labour and land in US.
3.Explaing the influences on this business in the global market
Political
Tensions between free trade and protection
? Globalisation seeing removal of barriers
? Eg. Quotas, tariffs, subsidies ? statistics
? Exports of wine have increased from 3% of sales to 52% of sales in 2002. this equals $2.3 billion dollars or 414 million litres
? US greatest source of export growth
? Australia's export policy has led to major reforms in the Australian wine industry
? ?Rationalisation of wine production' leading to overall efficiency giving them cost advantages over their competitors and reshaping of distribution lines.
? 4th largest wine exported in the world with 5% of global market
International organisations and treaties
? 1994 Uruguay multilateral agreement (WTO)
? Agreement to reduce protection on agricultural products (wines/grapes) by 36% by 2000
? UK has the largest export market of wine
Trade agreements
? US and Australia have strong trade relations and trade agreements
War in the Middle East
Weak economic conditions
Social ...